CAMBRIDGE Industrial Trust has pared its 9.76 per cent stake in MacarthurCook Industrial Reit (MI-Reit) to 2.73 per cent.
This came after MI-Reit got enough shareholders to approve a rescue package - a plan Cambridge had voted against. An announcement to the Singapore Exchange yesterday showed that Cambridge had sold off a substantial chunk of its stake last Tuesday, a day after the plan's go-ahead was secured at an extraordinary general meeting.
A check of the transactions that day indicates that many deals were transacted at above 30 cents. But Cambridge had bought at higher prices earlier last month, after MI-Reit announced its recapitalisation exercise. A big chunk - or 8.26 per cent - of MI-Reit was purchased at 40 cents. It subsequently increased its stake to 9.76 per cent.
Cambridge then tried to garner support to oppose the plan and said it intended to install itself as the manager.
Its plan was scuppered when the Monetary Authority of Singapore informed the trust that it was not allowed to manage both Reits.
Cambridge had said that MI-Reit's rescue plan - in which AIMS Financial Group, AMP Capital Holdings and other cornerstone investors get to buy 221.5 million new units at a hefty 70 per cent discount to the Reit's net asset value - was 'massively destructive' to value. The plan also includes a rights issue and acquisition of properties. Still, there were no other offers on the table and in the end, more than half of MI-Reit shareholders did not want it to fail.
MI-Reit has debts of $226 million due before Dec 31, plus a $90 million obligation to buy 1A International Business Park from Eurochem Corp by the same date.
The placement at 28 cents thus went ahead last Tuesday. The acquisition from Eurochem was completed yesterday.
MI-Reit declined to comment yesterday while Cambridge could not be reached for comment. MI-Reit shares closed 0.5 cent lower yesterday at 20.5 cents.
Source: Straits Times, 1 Dec 2009
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